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ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
ASRS; self-insurance program
Purpose
Expands the authorized uses of monies in a self-insurance program account.
Background
Current statute allows the Arizona State Retirement System Board of Trustees (ASRS Board) to establish a self-insurance program if the ASRS Board determines that self-insuring would be less expensive than and at least as effective as a fully-insured plan, while considering the risks and costs. If the ASRS Board establishes a self-insurance program, the program must include all statutorily required health coverage benefits. The ASRS Board must establish a separate account for any self-insurance program in an amount determined appropriate by ASRS. ASRS may not use or divert any part of the corpus or income of the account for any purpose other than to administer the program, unless the ASRS Board determines that a self-insurance program should no longer be offered. If a self-insurance program is no longer offered, monies in the account must be transferred to another account of ASRS as determined by ASRS (A.R.S. § 38-782).
In 2016, the Legislature required the Public Safety Personnel Retirement System (PSPRS) Board to establish, design and administer a defined contribution (DC) retirement plan. A DC plan is a retirement plan in which the employer, employee or both make contributions on a regular basis (Laws 2016, Chapter 2).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Prohibits ASRS from using or diverting money from a self-insurance program account for any purpose other than to provide benefits and to pay the administration costs and premium payments, rather than only to administer the program.
2. Requires monies in a self-insurance program account, if a self-insurance program is no longer offered, to be used to provide any remaining benefits and to pay premium payments and administration costs for the self-insurance program, rather than to be transferred to another account or ASRS.
3. Requires the ASRS Board to return any remaining monies in a self-insurance program account to the employer after the liabilities are satisfied.
4. Includes, in the authorized expenses of the separate account established by the ASRS Board consisting of premium benefits, the cost of administering health insurance premium benefits and the self-insurance program.
5. Conforms statutory references to reflect changes made by Laws 2016, Chapter 2 relating to the PSPRS DC retirement plan.
6. Makes technical changes.
7. Becomes effective on the general effective date.
Prepared by Senate Research
January 13, 2020
MG/gs